SME OWNERS REVEAL THE THINGS THEY WISH THEY HAD DONE DIFFERENTLY WHEN STARTING OUT
Small business owners have revealed the top five things that they wish they had done differently in their first years of trading, as new research highlights the ‘dos’ and ‘don’ts’ of starting a new business according to owners themselves.
The research found that small business owners wish they had got to grips with technology sooner, as owners admit they should have created a website, invested in better IT and bought accountancy software sooner than they did.
Other elements business owners wish they had started earlier include employing help and seeking financial advice, as the research reveals that financial administration takes up more head space than it does real time for business owners.
Business owners spend an average of just three hours 40 minutes on financial management per week, despite 59 per cent being worried about keeping their books in order and meeting accounting deadlines, nearly two thirds say they find managing the accounts one of the least rewarding elements of running a business.
The first steps for most start-ups are company and tax registration before they start trading, and over half take out public liability and employer liability insurance in the first few months. However, 60 per cent of start-ups admit they have difficulty understanding what types of insurance cover they need, with 58 per cent agreeing that insurance is a complex area.
Financial management comes next, with at least half engaging an accountant in the first two months, and most having some kind of software for managing their accounts by month four. Experienced entrepreneurs, who have started businesses before, also prioritise talking to a financial advisor, typically by the second month of trading, whereas novices typically delay until month five.
When the going gets tough, a third of first-time business owners turn to friends and family for support compared to a quarter of experienced business owners. Accountants and financial advisors are also trusted by one in ten new business owners who turn to them in times of trouble.
When it comes to staff and insurance, experienced business owners were found to understand the value of protecting their people and their business, taking out cyber insurance and protecting their assets just one month into operation. In contrast, the research found that novice entrepreneurs take out cyber insurance as late as seven months into the start of their business. The survey also found that experienced business owners are quicker to put benefits in place for their staff to aid the process of recruiting and retaining talent, while novice businesses are far slower to protect employees. Just under half of novice businesses have no private health cover, while 40 have no cover for long term health issues.
Darren Upson, Director of Small Business at Xero said: “Unfortunately there are no instructions when it comes to starting a new business as a first-time entrepreneur, so mistakes will inevitably be made along the way. The research from those business owners who have been through it has uncovered clear advice – invest in the technology that can help simplify your business admin and allow you to spend more time and energy growing your business.”
Andy Beswick, MD SME Solutions at Aviva, said: “We all look back on some of the decisions we have made and with hindsight, wish we had done things differently. But when you are in the middle of setting up your own business and about to start trading, there are a huge amount of priorities that need balancing and inevitably some things slip.”